September 29, 2017
CapitalPress.com
5
U.S. organic sales jump 23 percent in 2016
By CAROL RYAN DUMAS
Capital Press
U.S. farmers and ranchers
sold $7.6 billion in certifi ed
organic agricultural products
in 2016, an increase of 23 per-
cent from $6.2 billion a year
earlier.
Those sales came from
an additional 1,399 certifi ed
farms, up 11 percent, and
657,547 more acres, up 15
percent, USDA National Ag-
ricultural Statistics Service
reported Wednesday.
Ten states accounted for
77 percent of the sales, and
California continued to lead
the way.
The Golden State account-
ed for 38 percent of total U.S.
sales at $2.9 billion. With
the largest share of certifi ed
farms and organic acreage,
California added 76 farms to
its organic ranks and nearly
300,000 acres in 2016.
Washington lost its No. 2
ranking to Pennsylvania but
increased sales by $10 million
Certified organic farms, land and value of sales
Rank/state
Item
Farms
California
2015 2016
2,637 2,713
Idaho
2015 2016
168
166
Oregon
2015 2016
409
461
Washington
2015 2016
598
677
Acres (x 1,000)
4,361.8 5,019.5
790.4
167.2
178.6
175.7
194.8
71.8
78.7
3. ..... Wash.
Sales ($ mllions)
6,163.5 7,553.9
85
98
269.5
350.9
626.4
636.2
4. ........ Ore.
2,435.6 2,889.2
Source: USDA NASS
with 79 additional farms and
about 7,000 additional acres.
Oregon held its No. 4 spot,
increasing sales by more than
$81 million on 52 additional
farms and 19,000 additional
acres.
Nationwide, crops ac-
counted for 56 percent of or-
ganic sales at $4.2 billion, and
livestock, poultry and their
products accounted for 44
percent at $3.4 billion.
Milk, however, led prod-
uct sales at $1.4 billion, an
increase of 18 percent. Eggs
followed at $816 million, up
11 percent. Sales of broiler
chickens were up a whopping
Capital Press graphic
78 percent to $750 million.
Other heavy hitters were
apples, up 8 percent to $327
million, and lettuce – which
increased 6 percent to $277
million.
Other top organic crops
were strawberries, grapes,
tomatoes, corn, potatoes,
hay, spinach and mushrooms,
NASS reported.
The agency also noted the
2016 survey was expanded to
include grape data by variety
and to separate information
on fresh and processed fruits
and berries.
The National Trade Orga-
nization said in an email that
while it welcomes USDA’s
commitment to providing
important information on or-
ganic agriculture through its
farmer-based census, certifi -
er-based estimates show even
higher numbers.
Numbers from accredited
certifying agents in December
showed 14,861 organic farms
and 5.3 million organic acres,
compared with the 14,217
farms and 5.0 million acres in
the Sept. 20 report.
“Precise and current in-
formation on organic farm
sales and acreage is vital for
all organic stakeholders. The
organic industry cannot con-
$2,889
2,436
1. ...... .Calif.
U.S.
2015 2016
12,818 14,217
1,070
Sales ($ millions)
660
2...... .Penn.
332
636
626
351
269
297
5. ..... Texas
210
255
222
216
221
6......... Wis.
7. ........ N.Y.
201
187
8. ...... Mich.
9. ...... Colo.
181
155
10. ...... N.C.
145
82
tinue to thrive and maintain
stable markets without good
data collection,” OTA stated.
The organization also
pointed out that while over-
all growth in sales of organ-
ic agricultural production is
positive news, the latest re-
Top 10 states
in organic
sales, 2016
2016
2015
Source: USDA NASS
Carol Ryan Dumas and Alan Kenaga/
Capital Press
port highlights that growth in
livestock feed grains doesn’t
parallel the dramatic growth
in livestock products — not-
ing an ever-widening gap
between the supply of domes-
tic organic feed grains and
demand.
Amazon-Whole Foods combination may spark organic price war, economist says
By DAN WHEAT
Capital Press
PULLMAN, Wash. —
Amazon maybe heading for
a food price war with its ac-
quisition of Whole Foods, and
initial cuts have targeted the
organic produce sector that’s
becoming more important to
the Washington tree fruit in-
dustry, an industry expert says.
Seattle-based online giant
Amazon closed a $13.7 bil-
lion deal Aug. 28 to buy Aus-
tin, Texas-based Whole Foods
Market Inc. and the same day
cut prices of bananas 38 per-
cent, organic baby kale 12 per-
cent and tilapia 33 percent. In
a news release, Amazon said
its vision is to make “Whole
Foods Market’s high-quality,
natural and organic food af-
fordable for everyone.”
“The big problem for com-
petitors is Amazon doesn’t ap-
pear to be worried about debt.
It’s stock is $1,000 a share and
keeps rising and as long as it
does they can borrow from all
sorts of markets,” said Des-
mond O’Rourke, retired Wash-
ington State University agri-
cultural economist and world
apple analyst in Pullman.
What items Whole Foods
carries is being decided cen-
trally instead of locally and
brand representatives no lon-
ger may pro-
mote products
or check dis-
plays in-store,
the Wall Street
Journal has re-
ported.
B r o o k e Desmond
Buchanan, a O’Rourke
Whole Foods
spokeswoman, had no com-
ment on whether there will be
price wars. She said Whole
Foods will continue to discov-
er and sell local products while
selecting the best national
products possible.
“This improves the custom-
er experience and also ensures
local supplier are represented
in categories where they will
be successful and positioned
for growth,” Buchanan said.
With 460 Whole Foods
stores, Amazon is estimated
to be the fi fth-largest grocery
retailer in the country behind
Walmart, Kroger, Costco and
Albertsons, according to Cow-
en fi nancial analysts.
“What worries the retail
food industry is that Whole
Foods will indiscriminately
cut prices and companies like
Walmart and Kroger will have
to borrow the money or gener-
ate it from their own sales to
cut prices,” O’Rourke said.
They’re not growing as
fast and can’t borrow as much,
Capital Press File
Amazon’s ownership of Whole Foods spawns many questions on
pricing among organic tree fruit growers in the Northwest.
he said.
Retailers will pressure sup-
pliers such as tree fruit compa-
nies for lower prices but sup-
pliers can only go so low given
production costs, especially
with organics, he said.
“I think retailers are very
concerned. They are poised
to compete at the retail level.
Markets will settle where mar-
kets settle,” said Tom Riggan,
general manager of Chelan
Fresh Marketing in Chelan.
“The question is wheth-
er Whole Foods is willing to
lower its overall margin. Any
retailer will put pressure on
suppliers to be as low as they
can, but they have to keep sup-
ply and quality so it’s a fi ne
balance,” Riggan said.
Bob Mast, president of
Columbia Marketing Inter-
national in Wenatchee, said
Whole Foods has a “deep-
thinking group” that under-
stands consumers.
“When Amazon speaks
the world listens right now.
They are a powerhouse. The
day they made the purchase
stocks of big retailers took a
big dip,” Mast said.
Whole Foods is “aggres-
sively” pricing fresh crop
organic Gala apples at $1.49
per pound and other apples at
$1.99 versus $2.49 to $2.79
every day pricing at this time
last year, he said.
Whole Foods is “aggres-
sively challenging” suppliers
on price and appears to be
passing the savings on to con-
sumers, he said.
“We’re obviously con-
cerned because on organics
you have to have a premium
over conventional because
of cost of production,” Mast
said.
Organic fruit costs more
to grow and yields are lower,
he said. Fruit is smaller and
each drop in size equates to a
10 percent loss in volume of
packed fruit, he said.
Organic fruit is also more
perishable and doesn’t store
as well as conventional fruit
so its sales season is shorter,
O’Rourke said.
Yet large Washington tree
fruit companies — including
Zirkle-Rainier, Domex Su-
perfresh Growers and Stemilt
Growers — are moving heav-
ily into organics, O’Rourke
said.
This fall’s Washington ap-
ple crop is forecast at 130.9
million, 40-pound boxes, and
13 million of that, close to 10
percent, is organic, Mast said.
That’s up 20.8 percent from
last year, he said.
Stemilt announced Sept.
21 that 30 percent of its ap-
ples this year will be organic
and that it will continue the
three-year process of convert-
ing more acreage from con-
ventional to organic.
Despite higher costs and
risks, companies are moving
to organics because they and
managed varieties are the two
largest areas of growth with
consumers, Mast said.
Kroger and Walmart are
positioned well to compete
and tree fruit companies are
concerned a spread of lower
pricing on organics could hurt
their viability, he said.
O’Rourke said it may take
two to fi ve years to play out
and that the situation may not
be as threatening as other re-
tailers perceive.
“I think Amazon is taking
a huge gamble moving into
the retail food business be-
cause it’s not familiar with it
and it’s completely dispersed
from the business model they
run now,” O’Rourke said.
Amazon sells products on-
line and ships them from large
distribution centers where they
have tight control of opera-
tions, he said. There are more
operational variables with
greater human factors in re-
tail stores that companies like
Kroger have had 100 years to
master, he said.
Idaho starts anticipated large-scale recharge program
By JOHN O’CONNELL
Capital Press
BOISE — Though the irri-
gation season has not yet con-
cluded, the state has already
started recharging 61,100
acre-feet of storage water that
groundwater users provided
as mitigation to senior Surface
Water Coalition irrigators.
Idaho Ground Water Ap-
propriators Inc. is obligated to
give the coalition 50,000 acre-
feet of storage annually under
terms of a 2015 settlement to
the coalition’s long-standing
water call. It was fi led based
on declining Upper Snake
River spring fl ows attributed
to junior well irrigation.
Idaho cities that draw
groundwater from the aquifer
were also required to provide
2,600 acre-feet of mitigation
water, and industrial proces-
sors reached their own agree-
ment years ago to give the co-
alition 8,500 acre-feet.
The Upper Snake Reser-
voir system was still 69 per-
cent full on Sept. 26, follow-
ing an unusually wet water
year. Twin Falls Canal Co.
General Manager Brian Ol-
mstead explained coalition
members have no need for
mitigation water this sea-
son, so they’ve donated it to
support the state’s recharge
program — which pays ca-
nal companies fees to inject
surface water into the aquifer
through their unlined canals
and adjacent spill basins.
“I think we could have
a really dry winter and
still fill those reservoirs,”
Olmstead said.
The state started recharg-
ing the storage water on Aug.
30 and now has recharge un-
derway on three off-canal
sites in the Upper Valley and
one Lower Valley site, said
Wes Hipke, recharge coordi-
nator with the Idaho Depart-
ment of Water Resources.
The storage water alone
will nearly equal the total
volume of recharge the state
conducted in the 2015-2016
season, before recharging a
whopping 317,000 acre-feet
in 2016-2017. Measurements
taken late last March from
sentinel wells used to track
the settlement’s progress
showed the aquifer gained
600,000 acre-feet in the span
of a year, equal to half the ca-
pacity of Palisades Reservoir.
Amalgamated expects to equal or best record beet yield
By JOHN O’CONNELL
Capital Press
RUPERT, Idaho — Amal-
gamated Sugar Co. offi cials
say their early harvest results
suggest they’ll equal or exceed
last season’s record sugar beet
yields, despite facing harsh
growing conditions this sea-
son.
Duane Grant, chairman of
the board with Snake River
Sugar Co., which owns Amal-
gamated, explained the Idaho
and Oregon sugar beet crops
got off to a slow start due to
cool spring weather, which
was followed by the arrival of
excessive heat in June.
The company, nonetheless,
projects its growers will at
least equal the 41 tons-per-acre
of beets they averaged during
last year’s harvest — and
Grant said it’s possible they
could set a record yield for a
fourth consecutive year.
“They came out of a cooler
spring than normal and a hot-
ter summer than normal with
good yields,” said Grant, of
Rupert. “We really attribute
that to the steady improvement
in the quality of the genetics of
the crop we plant today.”
Grant noted this was the
fi rst season that growers plant-
ed a variety developed specif-
ically for Idaho’s conditions,
and more Idaho-specifi c va-
rieties will be released next
season.
However, Grant anticipates
the sugar content in each beet
will be down signifi cantly
from last season, resulting in
less fi nished sugar produc-
tion for the company. He said
Amalgamated projects its av-
erage sugar content will be
about 17.5 percent, compared
to 18.3 percent last season.
“In my own personal har-
vest, we’re seeing yields com-
parable with last year and up
slightly,” Grant said. “My sugar
is down half a percent to a full
percent.”
Grant said growers are an-
ticipating a profi table year,
nonetheless, based on the
strength of the domestic sugar
market.
American Sugar Alliance
economist Jack Roney said
several factors have aligned
to create a “bullish” U.S. sug-
ar market outlook. Primarily,
Roney said the U.S. recently
reached an agreement with
Mexico that effectively ends
ongoing dumping of subsi-
dized Mexican sugar onto the
U.S. market.
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